We Analyzed TechCrunch Disrupt Winner RecordGram

RecordGram is the freshest TechCrunch Disrupt winner. It is an iPhone app that vertically combines three different businesses: An online marketplace for music producers who sell their beats, a mobile recording studio that allows to record and video an original song, based on a downloadable beat, and a curation and discovery platform for artists, matching the best of them with producers.

RecordGram turns to the same user base: teenagers amateur artists with a dream to become professional artists or just turn more popular. For such an audience, Musical.ly is not enough. It lets them sing along other people’s songs and focusing on video qualities. RecodGram offers the same audience, the opportunity to download free or charge or $5 at the maximum (Producers are used to selling beats for hundreds or thousands dollars in average), record their song over the beat (Instead of paying hundreds of dollars to professional studios), video it, and share it in social networks.

Bringing down the price of recording a song, either by offering free or cheap beats or by saving the cost of studio sessions can appeal to teenagers around the world. Selling beats on a large scale, even for a lower price, can be an additional stream of revenue for music producers.

Business Model: RecordGram’s main business model is charging a monthly fee of $10 (or a yearly fee of $90) from producers that want to upload their beats to the platform. When those beats are leased by artists, RecordGram takes 20% of the in-app purchase and provide.

Marketing Strategy: The company has an affiliate network of ten music distribution companies, works with eight music marketing experts that cut deals with shows, concerts, and conferences, as well as with celebrities that engage with their audience through the app, such as Pitbull and Flo Rida. The company added so far more than 700 beats by top producers including Co-Founders Winston “BlackOut” Thomas, and MIMS, well as StreetRunner and Jason Derulo. The app was launched only at the beginning of May 2017, so it is too early to measure its usage and popularity. The company is a part of the only music technology accelerator in the U.S, Project Music, funded by Universal, Warner Music, Maverick, Landscape, and more. It is self fuded, probably by the co-founders and their friends and family.

Exit Strategy: According to the company, acquiring RecordGram could be a market differentiator for Apple, Google or Amazon. Beats CEO Jimmy Iovine is now working on a TV show production, and Amazon is already producing a bunch of successful TV series such as Mozart in the Jungle and Transparent.

Competitors: ReordGram competes with online downloadable beats services such as Beatstars, recording studios as well as apps such as Musical.ly and Smule’s Autorap. RecordGram actually vertically integrated all of the competitors offering combined. Beatstars allows beats download but you have to take it to a studio. Musical.ly doesn’t allow to create original music. Smule’s Autorap is solely a mobile recording studio. In addition, the app is not leaning on any major label.

SoundBetter is also considered an indirect competitor. The company has already an established market, targeting serious independent musicians, connecting them with top music production professionals. So far, SoundBetter delivered million of dollars to its members.

Source: Zirra.com

Risk factors:

1.RecordGram doesn’t have any proprietary technology. However, the company filed a provisional patent based on its business model that integrates three services: mobile production marketplace, mobile recording studio and a social network that curates and distributes RecordGrams’ artists.

2.As a user-generated content platform, RecordGram does not filter producers or artists, thus creating a richness of content with only marginal curation.

3. Although its name has similarity with Instagram, RecordGram does not offer a variety of sound effects, that could improve the quality of the production or just make the app more playful. This advantage is kept for professional studios in the meantime.

4.According to the founders, the app will appeal to “Musical.ly’s 8-12 years old users”. It remains to be seen how serious is its privacy policy and abuse prevention mechanisms, considering RecordGram allows users to connect via its social network layer.

5. The platform is not yet ready to sell songs or sign artists at labels. It is impossible to sell a song that is based on one of the platform’s producer’s beats without resolving digital rights protection first, which could be done manually.

6. Copyright infringement is still a threat although the company claims it has off the shelf technology to prevent it from happening.